Interpretation of nonlinear difference-in-differences: the role of the parallel trends assumption

Scott Barkowski

MPRA Paper from University Library of Munich, Germany

Abstract: I argue interpretation of nonlinear difference-in-differences models depends on the form of the parallel trends assumption. When they are assumed in the natural scale of the dependent variable, the treatment effect is the interaction effect (a cross-difference). If they are assumed in the transformed scale, it is a single difference. I further note that assuming parallel trends in one scale implies they do not hold in the other, except in special cases. Finally, I consider log-linear (and related) difference-in-differences models and provide a constant form of the treatment effect that is comparable across applications with different parallel trends assumptions.

Keywords: Difference-in-differences; Nonlinear Models; Model Interpretation; Identification; Probit; Logit; Log-linear; Semilogarithmic (search for similar items in EconPapers)
JEL-codes: C21 C23 C25 (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-ecm and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/108975/1/MPRA_paper_108975.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:108975

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().